LNG

French liquefied natural gas storage technology firm and smart-shipping services supplier, Gaztranzport and Technigaz (GTT), has signed two technical services agreements for ships owned by Jovo Group of China.

Gaztransport and Technigaz (GTT), the French LNG storage technology company, has received another order from Dalian Shipbuilding Industry Co. in Northeast China for the tank designs for three LNG carrier newbuilds.

GTT said the latest order was received from its technology partner Dalian Shipbuilding on behalf of Chinese company China Energy.

The Paris-based company added that the tanks chosen for these three vessels, which will each offer a capacity of 175,000 cubic metres, will be the Mark III Flex membrane containment system.

GTT  said that the delivery of the vessels was scheduled for the first half of 2027 and the first quarter of 2028.

The latest order is the second this month from the Dalian yard after a previous order for two ships from Sea Jade Investment, a joint venture comprising Hong Kong-based shipping company Wah Kwong as well as China Gas and China Ship Leasing.

Capacities

Those two vessels will each have capacity of 175,000 cubic metres and will be fitted with the GTT Mark III Flex membrane containment system.

The delivery of the vessels for the Sea Jade consortium is scheduled between the first and the third quarters of 2027.

GTT has also noted in its most recent newsletter just published that the LNG sector had demonstrated more than 60 years of successful and safe operations. 

The French firm said it had contributed to this success though continuous innovation in new solutions, new design proposals and efficient assistance in the construction of well over 2.500 LNG storage tanks.

Modular tanks

GTT is also advancing marketing propositions for its modular LNG storage tanks that can be delivered by ships or barges, for example, to areas isolated from on the ground engineering expertise.

“Amid rising global energy prices and higher demand, new greenfield onshore projects are running into inflationary headwinds and facing significant challenges to deploy cost-effective LNG storage solutions,” said GTT.

“This is particularly true when accessing remote areas where logistics are complex and skilled manpower is difficult to deploy,” the firm added.

“Moreover, as projects become increasingly modularised, slower erection times inherent to stick-built tanks often drive overall project delivery,” GTT said.

Of the top ship-owning nations, the Greeks continue to outperform the nation’s size with a fleet ranked third globally behind Japan and China respectively in both the number of vessels and the total value, though Greece’s fleet value has been augmented by an increasing number of quality LNG carriers.

COSCO Shipping Energy Transportation of China has ordered three liquefied natural gas newbuilds from Hudong-Zhonghua Shipbuilding of Shanghai to take its future fleet numbers up to 44 LNG vessels.

COSCO gave details in a statement to the Hong Kong stock exchange of the payments plans for the vessels and delivery dates.

The company said that the combined price of the three vessels would be $554 million.

“The board is pleased to announce that on 7 December 2021, ‘United Auspicious LNG’, ‘United Peace LNG’ and ‘United Success LNG’ (each being a wholly-owned subsidiary of United Liquefied Gas Shipping, an indirect non-wholly-owned subsidiary of the Company) entered into the shipbuilding contracts with Hudong-Zhonghua Shipbuilding and China Shipbuilding Trading,” added the statement.

The indirect non-wholly owned subsidiary of COSCO, United Liquefied Gas Shipping, is owned 81 percent by the company and the 19 percent balance is held by PetroChina International.

Growing fleet

COSCO currently has an LNG fleet of 41 LNG carriers in total, of which 38 are in operation with a shipping capacity of 6.42 million cubic metres.

COSCO noted that its LNG shipping projects involved two subsidiaries, COSCO Shipping LNG Investment (Shanghai), a wholly-owned subsidiary, and China LNG Shipping (Holdings) of which COSCO has a 50 percent stake.

The newbuilds just ordered each have capacity of not less than 174,000 cubic metres and guaranteed deadweight of 80,000 metric tons at design draught each.

“Pursuant to the shipbuilding contracts, the consideration for each of the vessels is approximately US$185 million,” said COSCO.

“The price of each of the vessels is payable in four instalments of 10 percent, 10 percent, 10 percent and 70 percent, respectively based on the shipbuilding progress,” added the company.

COSCO said that the fourth instalment of 70 percent could be adjusted to take account of certain issues such late delivery and performance deficiencies of the vessels.

The company said the cost of the three newbuilds would be funded by the group with 80 percent bank borrowings and around 20 percent from financial resources.

“The delivery of the three vessels is expected to take place on a date no later than 30 September 2024, 31 December 2024 and 31 March 2025, respectively,” the statement concluded. 

Gaztransport and Technigaz (GTT), the French LNG storage technology company, has received another order for a China-built LNG carrier as its Chinese business links increase and broaden.

Cosco Shipping Energy Transportation, the biggest Chinese owner and operator of oil and gas vessels and with a growing number of over 40 liquefied natural gas carriers in its fleet, has approved an investment in three LNG carriers for the Russian Arctic LNG II project of Novatek and its partners.

The Northern Sea Route (NSR) from Arctic Russia to North Asia has reopened earlier than in recent years, providing scope for LNG shipments to be re-directed from the Atlantic Basin to Pacific Basin as prices remain low, though are rising faster in Asia.

The NSR is officially defined by Russian legislation as lying east of Novaya Zemlya archipelago and specifically running along the Russian Arctic coast from the Kara Sea to the Bering Strait to enter the Northern Pacific Ocean.

The 172,600 cubic metres capacity Arctic-class LNG carrier “Christophe de Margerie” left the Yamal LNG export plant in Northern Siberia, operated by Novatek, on May 18 and is scheduled to arrive at the Chinese Tangshan import terminal on June 11 after a transit of 23 days.

The Tangshan terminal is in the northern Chinese Hebei province and is operated by PetroChina.

Shipping data shows that the “Christophe de Margerie” is accompanied by another tanker and two nuclear-powered ice-breakers, the “Yamal” and the “Vaygach”.

It is only in recent years that the NSR has started to be used earlier by LNG carriers pushing ahead to deliver cargoes to North Asia.

The 172,600 cubic metres capacity LNG carrier “Vladimir Rusanov” was the first vessel to use the NSR in 2019, having lifted a cargo at the Yamal plant in mid-June.

However, the “Vladimir Rusanov” is in Western European waters and scheduled to discharge a cargo on May 24 at the Montoir-de-Bretagne terminal in Western France.

According to analysts, the early availability of the NSR, coupled with a slowly opening Europe-Asia LNG arbitrage window - at historically low values - will result in a redirection of many Yamal cargoes away from Europe and to be pointed at North Asia.

Three other carriers are currently heading back to the Yamal plant's port at Sabetta from Europe and at least one could lift an Asia cargo.

They are the two 172,000 cubic metres capacity vessels, the “Georgiy Brusilov” and the “Vladimir Vize”, and the 172,600 cubic metres capacity carrier “Vladimir Voronin”, with arrivals scheduled before the end of May, according to shipping data.

The re-opening of the NSR comes as the Platts Japan-Korea Marker spot cargo price for North Asia cargoes for July is at $2.280 per million British thermal units and at $2.425 per MMBtu for August, higher than several weeks ago.

That’s as the European LNG price indicators, the UK National Balancing Point and the Dutch Title Transfer Facility, were lower at the equivalents on May 20 of $1.40 per MMBtu and $1.55 per MMBtu respectively.

There is currently a wider debate in Russia about accommodating much more energy shipping traffic on the NSR as usage increases.

Russian oil company Rosneft is progressing with the development of its Vostok Oil Project, a venture that is projected to deliver 25 million tons of shipments from a special seaport via the NSR by 2024.

The oil project is based on the development of several fields, including at least three in the Vankor area.

Vostok Oil will also include the development of 15 new industry towns, two airports and about 800 kilometres of new pipelines.

The traditional NSR that has been the main reference point in Russian Arctic shipping is now being debated by the government.

Growth in shipments on a wider route have been rising. Russian government data shows that in 2019, a total of 31.5 million tons of shipments were transported on the NSR, an increase of over 55 percent from 2018.

Most of the extra shipments were LNG from the Yamal plant.

Now the Russian government is referring to the Northern Sea Transport Corridor and has drawn up a report on increasing traffic volumes.

According to the Association of Sea Trade Ports, the transport corridor will be clearly referred to in the new Russian Arctic Strategy, a document that now awaits approval by the government.

The document has been written by the Russian Ministry of the Far East and Arctic and was submitted to the government on 7th of May 2020. The strategy covers the period until 2035.

Cosco Shipping Energy Transportation Co., China’s largest LNG shipping business and the world’s biggest operator of oil tankers, has outlined its future strategy and its fleet management efforts.

That’s as Cosco reported total annual revenues from operations of 13.72 billion Chinese yuan ($1.92Bln), a year-on-year increase of 13.4 percent.

Its gross profit (EBITDA) was reported as 5.29Bln yuan ($747.4M), representing an increase of 36.3 percent from the previous year.

Cosco’s latest earnings and strategy emerged in its annual report just released by the Hong Kong Stock Exchange.

The group’s LNG subsidiaries include Cosco Shipping LNG Investment (Shanghai) Co., a wholly-owned by the group, and China LNG Shipping (CLNG), in which the group holds a 50 percent stake.

The two are the only large-scale LNG shipping companies in China and have a combined fleet of 38 carriers with aggregate capacity of 5,900,000 cubic metres.

Three other LNG vessels under construction with aggregate capacity of 522,000 cubic metres.

Cosco posted LNG shipping revenue of 1.32 billion Chinese yuan ($186.5M), an increase of 11.9 percent compared with 2018 as its fleet slowly grows.
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The Shanghai-based company said that it planned to expand over time in the LNG sector, given the increasing global needs for cleaner fuel.

“The group has recognized the transportation of clean energy as the second development curve, and will seize market opportunities, give full play to competitive advantages and promote the development of potential LNG shipping projects,” it stated.

The company said it was working to improve its existing LNG fleet management system and the LNG vessels were becoming more competitive.

“Shanghai LNG, a subsidiary of the Group, passed the certification of Lloyd’s Shipping Register and obtained the first certificate for quality, health, safety and environment (QHSE) management system in China’s LNG shipping industry,” said Cosco.

“The accomplishment of the authoritative certification for the management system strengthened the Group’s position as a leader in China’s LNG shipping business,” it added.

Cosco said its overall transportation turnover for all vessels (excluding time charters) was 440.78 billion ton-nautical miles, a decrease of 19.2 percent year-on-year.

In terms of its oil fleet size, Cosco says it is the world’s largest tanker owner with a fleet of 151 crude tankers owned and controlled with a total capacity of 21.71 million dead weight tonnage (DWT).

The crude tanker fleet includes 142 self-owned vessels with a capacity of 19.25 million DWT, nine chartered-in tankers with a capacity of 2.46 million DWT and 17 new oil tankers on order with a capacity of 3.04 million DWT.

Cosco actively responded to the 2020 global sulfur limit overseen th by International Maritime Organization and will help promote the sustainable development of the industry.

Currently, all oil tankers of the group use low-sulfur fuel to meet the sulfur limit.

In addition, Cosco cooperated with Dalian Shipbuilding Industry Co. to develop the world’s first LNG dual-fuel Very Large Crude Carrier in compliance with phase III of the ship energy efficiency design index.

“With the international oil shipping market rebound in 2019, the group actively sought cargoes and reasonably raised voyage speeds, which caused a 11.7 percent year-on-year increase on unit bunker fuel consumption,” it explained.

“The company applied an efficiency optimization model in managing the voyage speeds and achieved the savings of 112.2 thousand tons of bunker fuels,” it noted.

During the reporting period, Cosco’s vessels in drydock increased by over 60 percent year-on-year.

This was due to the aging of vessels and the sulfur cap and spare parts replacement.

“Facing the rising demand for drydocking, the group actively communicated with shipyards to strictly control the non-operating period in arranging dry-docking schedules, which saved over 100 days and improved the fleet operating efficiency,” said Cosco.

China Merchants Energy Shipping (CMES), the energy ship operator of the  Hong Kong-based China Merchants Group, said it planned to acquire stakes in LNG vessels dedicated to Russian Yamal LNG deliveries and the dry-bulk vessel assets of its subsidiary Sinotrans.

European classification society DNV GL entered into a joint development project with Chinese Huangpu-Wenchong Shipbuilding Co. for LNG dual-fuel containership.